Microsoft Partners Want Simpler VDI Licensing In Windows 8

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Mobility and cloud computing are changing the way organizations work, and Microsoft is eagerly trying to establish itself in both areas. But some partners feel Microsoft's rigid desktop virtualization licensing terms, which make it difficult for cloud service providers to sell its products, are slowing its progress.

Last week, Microsoft announced that OnLive, a cloud service provider that offers a Windows 7 desktop-as-a-service with Office apps, is violating its licensing terms. At the same time, Joe Matz, corporate vice president for Microsoft’s Worldwide Licensing and Pricing group, said Microsoft's licensing terms are designed to "provide clarity and consistency for our partners."

Be that as it may, Microsoft still has a lot of work to do in delivering on this pledge, several partners and analysts told CRN.

"The Microsoft road map is unclear at the moment, and I actually think they're strangling the market in some ways. This ambiguity makes it difficult to sell these products," said Mike Ritsema, president of i3 Business Solutions, a Grand Rapids, Mich.-based solution provider.

Microsoft partners can sell hosted Windows 7 desktop-as-a-service through VDI as long as the end customer has an existing licensing agreement with Microsoft. However, partners must also have dedicated physical hosts for each customer, which makes this scenario prohibitively expensive, said Chris Ward, vice president of consulting and integration at Greenpages, a Kittery, Maine-based solution provider.

"Obviously, this doesn’t scale at all, so it really makes zero sense for any provider to offer desktop as a service this way," Ward said.

Scott Rosenberg, CEO of Miro Consulting, a Fords, N.J.-based consultancy that specializes in licensing issues, said Microsoft is still trying to figure how the economics for Windows and Office in virtual environments.

"I think Microsoft is stuttering a little bit in terms of where to get revenue," Rosenberg said. "Do they try getting it from the consumer, who will push back hard, or the service provider, who can absorb the hit and pass it along to customers?"

Microsoft declined to comment on whether it is planning any adjustments to Windows 8 VDI licensing for desktop-as-a-service scenarios.

However, Microsoft has changed its desktop virtualization licensing in the past in response to criticism from partners and customers.

In 2010, Microsoft got rid of the unpopular Virtual Enterprise Centralized Desktop (VECD) license, which required customers to pay $23 per device annually on top of their Software Assurance (SA) subscriptions. At the same time, Microsoft introduced its Virtual Desktop Access license (VDA) which covers devices that aren't covered by SA and costs $100 per device annually.